Saturday, August 9, 2014

Self-Checkout Technology is Destroying Our Culture

I read a great book a few years ago called Identity Economics, basically arguing that a productive avenue for economic analysis is to incorporate 'identity' costs and benefits into individuals' utility functions. Identity costs and benefits are largely determined by culture and social interaction. It focused a lot on workplace issues, but the most interesting application of the approach is in consumption habits.

For example, more and more restaurants and convenience stores are offering self-checkout services and online ordering. It seems intuitively true that these innovations, designed mostly with an eye towards reducing employers' costs (labor in the case of self-checkout kiosks) have really interesting effects on consumers' consumption habits.

These technologies insulate consumers from the effects of social and cultural norms over buying patterns. Higher levels of anonymity when buying stuff reduces the costs--or benefits--associated with personal identity. The key empirical question is about magnitudes: does CVS see an increase in sales of embarrassing or socially-undesirable goods after installing self-checkout machines? What about a reduction in 'filler' items designed to mask the conspicuousness of purchasing these items?

On a macro-level, the question is whether these changes result in better or worse outcomes relative to your big policy goals. Are taboos against bingeing on unhealthy food (presumably a beneficial function of culture) becoming less effective? That's bad. Is the awkwardness of purchasing condoms or certain medical products reduced? That's good. Social and cultural norms have benefits and costs. Anonymous consumption shields a massive aspect of modern life from them. We'll see what happens.

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